In boardrooms across the world, CEOs, CDOs, and CIOs are rushing headlong into the world of digital using big data analytics, smart machines and automation tools for key aspects of their organizations. This change in mindset is being driven by two things – the growing density of digital capabilities and the increasing demands of customers. And, as these leaders continue pushing their digital agendas forward, it is worth taking a pause to understand the vocabulary and see its implications across different segments of a business.
Leading consulting firms and publications have shed light on the topic of digital transformation. We looked at the best minds in the business, summarized their themes, and highlighted what we thought constituted the best.
Digital Transformation and its impact on Business
Business success today requires a customer-focused digital transformation. It starts with prioritizing a superior and relevant customer experience and aligning the organization, processes and technology to power it.
“Digital has been a driving force of change across industries, and the transformation is accelerating. One can measure the pace of digital disruption in months while it takes years for an organization and its people to fully embrace such fundamental changes in the way they operate.”
– Emmanuel Durou, Partner and Technology, Media & Telecommunications (TMT) Leader at Deloitte in the Middle East
Digital transformation is about changing the way processes, people and technology work to create efficiencies, new sources of innovation, and new insight that was not readily available previously. More importantly, digital transformation is most effective when putting the customer at the center of the digital ground swell.
Transformation is the continual evolution and alignment of:
An enterprise’s strategic and financial objectives
Its business, operating, functional, and human capital models
Its ability to deploy change and adapt within continually evolving external environments
Bain and Company
Data interactions create exponential growth in innovation; adoption cycles shorten as frequent innovation becomes the ‘new normal’. Companies begin to digitize ‘standard’ business processes previously made by paper, in-person or by workers.
Boston Consulting Group
Leveraging digital technologies is more than just good business—it’s crucial to staying relevant and profitable. Companies lagging in this area risk losing ground to newer entrants and business models that are poised to disrupt markets with innovative products and services.
“Digital transformation isn’t just about procuring a CRM, ERP, or office automation system. It requires building out what we refer to as systems of intelligence — digital feedback loops that help you better engage with your customers, empower your employees, optimize your operations, and reinvent products and business models.” – Satya Nadella, CEO
On its importance in Change Management
Digital transformation has become the ultimate challenge in change management because it impacts not only industry structures and strategic positioning but all levels of an organization (every task, activity, process) and its extended supply chain.
Source: Capgemini, Corporate Website
Harvard Business Review
Technology offers professional services firms a way out of their predicament. By leveraging the power of algorithm-driven automation and data analytics to “productize” aspects of their work, a number of innovative firms are finding that, like Google and Adobe, they can increase margins as they grow, while giving clients better service at prices that competitors can’t match.
Change management does not just enable organizations to achieve their transformation objectives. It also provides enhanced benefits such as reduced disruption to the organization, a more resilient and adaptable workforce and overall de-risking of future change.
On its Relationship with Asset-Management
To optimize the potential of digital technologies, asset management firms should concentrate on end-to-end solutions that streamline and automate as many processes as possible.
On helping you stay ahead of competition
The power of a digital transformation strategy lies in its scope and objectives. Less digitally mature organizations tend to focus on individual technologies and have strategies that are decidedly operational in focus. Digital strategies in the most mature organizations are developed with an eye on transforming the business.
Organizations across the board are using digital to improve efficiency and the customer experience, but higher-maturity organizations differentiates themselves by using digital to transform their business, allowing them to move ahead of the competition.
A competitive advantage introduced by one company forces competitors to respond, creating a cycle of advance and respond that drives transformation. Digital technology accelerates this cycle, making it more difficult to erect and maintain barriers to entry.
Despite overwhelming agreement on the power of digital transformation and its capability to disrupt existing business models, our recent research on ‘Digital Transformation: State of the Consulting Industry’ we found some disparities. A significant number of consultants who participated in our research felt that they are not too far in their own digitization path. But, they do, consequently, offer digital transformation services to their clients.
Firms are only making surface-level changes, like value proposition, in response to digital trends. Respondents stated that their firms are only making surface-level changes, like value proposition, in response to digital trends. The largest changes their firms are making are not the capabilities, skills, or people that will help them in their priorities.
Interestingly enough, most respondents thought of digital transformation in terms of operations and customer experience. What stood out is the omission of culture and leadership in the descriptions, which when combined with the biggest hurdles to a more digital process (lack of appropriate IT infrastructure and management buy-in) and makes it clear that this is an area that requires additional focus.
For the full summary report, click here
Digital Transformation: How Leading Consulting Firms Define It